Although we disagree with the idea that "the tape tells all," it is important for all traders to stay on top of key technical happenings on the charts. Below is our current "executive summary" take on the State of the Tape.

Technical Talk: August 3, 2009

The Trend and Momentum Indicators:

Short-Term Trend: Logic would suggest that the short-term trend ought to be due for a rest in here at some point. However, so far at least, the bulls continue to keep on keepin' on.

Intermediate-Term Trend: Yet another new cycle-high on the indices means the intermediate-term trend remains positive at the present time. We would downgrade the trend rating on a move below 968.

Market Internals: Both our short-term and intermediate-term trend-and-breadth-confirm models are positive today.

Market Momentum: One of our momentum models stubbornly refuses to pop into the highest mode - probably due to the lighter volume seen recently. However, since we use a tree-of-indicators approach, the message remains moderately positive.

The Early Warning Indicators:

Overbought/Oversold Condition: Same song, different day… Stocks remain overbought on a short-term basis and are now close to becoming overbought on an intermediate-term basis.

Investor Sentiment: Although sentiment can definitely become more optimistic and is not yet at extreme levels from a longer-term perspective, our sentiment indicators are now near the highs for the year in some areas.

Current Strategy:

Anyone looking for a pullback as an opportunity to add long exposure has to be frustrated by the current action. However, if you've been around long enough to see the way markets act when the economy exits a recession, the action isn't surprising. So, while we would not be surprised to see a pullback of -3% to -5% at any time and for any reason, we will continue to lean long and enjoy the ride as the battle for S&P 1000 rages on.

We're Short-term Buyers At: A pullback to 970 - 975 on S&P

We'd be Short-term Sellers at (or near): A close below 974 on S&P

S&P 500:

NASDAQ Composite

The indicators we have displayed on the chart above include: 100 day exponential moving average (blue), 50 day simple ma (purple), 25 day simple ma (cyan), 10 day simple ma (orange), standard deviation bands using 1.9 std dev of 21 day and stochastic %K using 14 and %D.

   S&P 500 Intraday

   S&P 500 Last 3 months

   S&P 500 Last 6 months

   S&P 500 Last 12 months

 

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